The SEC insider trading investigation added another "notch to its belt," this time from across the Atlantic Ocean in Spain.  Former Banco Santander S.A. analyst Juan Jose Fernandez Garcia of Madrid, Spain agreed to pay $626K in disgorgement and penalties to settle charges he illegally traded in advance of a corporate takeover by a company that Santander advised.  The settlement requires court approval. 

The SEC first accused Garcia on 8/20/10, when it filed an emergency court action charging Garcia and another trader in Spain, and obtained an ex parte temporary restraining order and asset freeze over the funds held in Garcia’s brokerage account at Interactive Brokers LLC.  Just days earlier Garcia allegedly had traded on the basis of material, nonpublic information about a multi-billion dollar cash tender offer by BHP Billiton Plc to acquire Potash Corp. 

At the time, Garcia was the head of a research arm at Santander that was advising BHP on its bid.

Garcia purchased 282 call option contracts for Potash stock in the days leading up to the public announcement, and immediately sold all of his options following the announcement for illicit profits of $576,033.  The SEC’s charges against the other trader, Luis Martin Caro Sanchez, remain pending.

        SEC Staff Credits.   Jonathan Polish, James Lundy, Frank Goldman, Dee O’Hair of the Chicago Regional Office handled the litigation.   [SEC Release 11-98, 4/25]]